Claims settlement in PMFBY to ease with timely subsidy deposit

The Centre announced the delinking of its premium share with States’ contribution under crop insurance scheme for faster claims settlement as farmers were suffering despite paying their share of premium at the time of enrollment.

Under the Prime Minister Fasal Bima Yojana (PMFBY), farmers pay a nominal 2 per cent of the sum insured as premium in kharif season and 1.5 per cent in rabi and 5 per cent for cash crops in both seasons. The remaining premium amount, derived after tender for different crops in different clusters, is shared at 50:50 by Centre and States.

Addressing an event to launch separate portal and a mobile APP, Agriculture Minister Narendra Singh Tomar said that farmers were without their fault waiting for claims payment for a long time despite paying their share of premium. “Now we have decided that Centre will pay its share in time, even if there is delay by States, so that claims can be settled, either fully or partially,” Tomar said.

As States were defaulting in paying their share of premium subsidy, the Centre too was not releasing its share.

Last year, the Centre had mooted a proposal for States and Centre to build a corpus where some portion of premium subsidy could be deposited in the form of bank guarantee and in case of default, that BG can be encashed. However, many states had opposed the proposal, and finally it was shelved.

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